Multi-million dollar compensation for the chief executive officers of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. has been eliminated by a new law.
On the one hand, Fannie Mae and Freddie Mac CEOs run companies that are responsible for over $5 trillion in mortgages — seemingly justifying $4 million in annual compensation to attract high-caliber leaders.
On the other hand, the pair of housing finance giants were bailed out by the government, they are controlled by the government, and the CEO compensation exceeds even the president’s own $400,000 salary.
Lawmakers and the president have sided with supporters of the latter.
On Wednesday, President Obama signed
S. 2036, the Equity in Government Compensation Act of 2015.
The new law
suspends the $4 million compensation packages recently approved by the Federal Housing Finance Agency for Fannie Mae CEO Timothy J. Mayopoulos and Freddie Mac CEO Donald H. Layton.
FHFA previously authorized the GSEs to propose compensation as high as $7.26 million — which would have put the CEOs
compensation as high as the 25th percentile of the market.
Instead, the legislation reinstates the two CEOs’ the $600,000 in compensation and benefits previously in effect.
“The bill, which caps the salaries of the CEOs of Fannie Mae and Freddie Mac, is the first major standalone legislation enacted that deals with the GSEs since they were placed into conservatorship,” Rep. Ed Royce (R-California) — who introduced
H.R. 2243, the Equity in Government Compensation Act of 2015, which was used as the model for S. 2036 — said in a written statement.
